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The land in Singur where the Tata plant was supposed to come up. Photo: Subrata Majumder

In a major setback to Tata Motors, and a victory for now Bengal CM Mamata Banerjee, the Supreme Court on Wednesday set aside the acquisition of 997 acres by the Left Front-led West Bengal government in 2006 to help Tata Motors set up its Nano plant in Singur.

The court has directed the state government to take possession of the land and re-distribute it to land owners within 12 weeks.

In 2006, Tata Motors said that it would set up its global small car project, Nano, in Singur, West Bengal, an announcement that coincided with the beginning of Buddhadeb Bhattacharjee's second innings as chief minister.

However, rumblings against acquisition of land in Singur, which happened to be a multi-crop agrarian region, started soon after the land was selected. Around 2,000 farmers of 13,000 farmers that accounted for the project area of 997 acres started an indefinite agitation backed by Opposition leader, Mamata Banerjee, which ultimately led to the pullout of the project by Tata Motors in 2008.

The apex court also said that those who got compensation and thereby became 'willing' farmers will not have to return the money because they were deprived of their livelihood for the past 10 years.

The West Bengal government had invoked the Land Acquisition Act of 1894 to acquire 997 acres for the project -- 647 acres for Tata Motors and the balance for ancillary units associated with the project --on the grounds that it was for 'public purpose'.

The Supreme Court, however, noted that land acquired for a private company’s project cannot be termed 'public' project, essentially reversing a Calcutta High Court judgement of 2008 that had declared the project as being for 'public purpose'. The basic premise of the Calcutta High Court judgement was that it was for economic activity and employment generation.

Today's Supreme Court verdict is a victory for Mamata Banerjee who has steadfastly fought to return 400 acres to the 'unwilling' farmers of Singur.

Hours after assuming the role of chief minister, Mamata Banerjee had announced the Cabinet had decided to return 400 acres to hold-out Singur farmers, fulfilling one of her pre-electoral pledges.

Tata Motors had moved Calcutta High Court against the Singur Land Act soon after the Act was passed in the Legislative Assembly.

A single judge order had observed certain shortcomings of the Singur Act, but rectified it by 'purposive interpretation of the provisions of Act' and declared it valid. But Tata Motors moved a higher bench against the order.

In 2012, a Division Bench of Calcutta High Court had struck down the Singur Land Act and termed it unconstitutional and void which led the West Bengal government to file an appeal in the Supreme Court.